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Market Wrap-up for Mar. 12 - Five Dividend Aristocrats on Sale

It has been an eventful week on Wall Street as the U.S. bull market turned six years old on Monday; but since then, it hasn’t been much of a celebration as profit taking pressures have emerged in recent days, although “dip buyers” have swooped in a bit this morning.

Alas, many are running for the hills (yet again) after the sell-offs seen during Tuesday and Wednesday’s trading sessions. We’re not too rattled however and you shouldn’t be either. We’ve preached it before and we’ll proudly preach it again — corrections are merely opportunities in disguise. If you need a reminder, here are Three Reasons Not Get Rattled by Any Correction.

Time to Bargain Shop for Dividend Aristocrats

Instead of running away from the market amid the pullback, we would much rather run towards beaten down securities in an effort to catch them before they rebound. More specifically, we want to take advantage of beaten down dividend aristocrats; this refers to companies which have been raising their dividends for more than 25 years in a row.

A few weeks back, we outlined an easy way to avoid rate hike fears altogether, and that is, by focusing on companies that have survived more than one rate hike cycle.

Today, we’re taking the time to point out specific companies that boast the Dividend Aristocrat label, but happen to be trading at steep discounts at the moment. The stocks profiled below are all down 10% or more over the trailing 1-year period; while their lackluster performance may seem like a red flag to some, remember that these stocks should not be analyzed solely through such a limited time horizon lens, because after all, they have been raising their distributions for at least 25 years in a row.

Raven Industries (RAVN )
Based out of Sioux Falls, South Dakota, this diversified manufacturer of precision agriculture products has fallen on hard times recently, with its share price declining 46% over the past year. What’s encouraging however is that RAVN has been raising its dividend for 29 years, and it has done so by 12.7% on an annualized basis over the past five years.

Stepan Co. (SCL )
Founded in 1932 and based out of Northfield, Illinois, this chemical maker supplies other firms engaged in the manufacture of cleaning products for consumers and industrial markets; unfortunately, the stock has been hammered over the past year, shedding nearly 39%. SCL has been raising its distribution for 47 years in a row and its annualized five-year dividend growth stands at a solid 8.9%.

Dover Corp. (DOV )
Shares of this well-known diversified manufacturer of industrial goods has slipped almost 12% over the past year. What’s encouraging however is the DOV’s dividend history; the stock has raised its distribution for 59 years in a row at an average rate of 8.7% over the last five years.

Emerson Electric (EMR )
Another well-known diversified manufacturer of industrial equipment and components, shares of EMR have lost just over 12% over the past year. Nonetheless, the stock boasts 58 years of dividend increases and it has managed to grow its distribution by 5.8% annually on average over the last five years.

Diebold, Inc. (DBD)
Founded in 1859, this global leader in security systems has seen its shares shed 13% over the past year. DBD has been raising its distribution for an impressive 61 years in a row, although its annualized dividend growth stands at a paltrier 2% over the past five years.

The Bottom Line

It’s terribly easy to get caught up in the day to day swings on Wall Street. We’d prefer not to burden ourselves with trying to time the market over the short and medium-term; instead, we recommend you focus on high-quality stocks with a proven track record of rewarding shareholders. If you’re looking to put your cash to work today, consider any of the stocks profiled above as they have demonstrated their ability to weather all sorts of economic environments over the years.

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